Handling of errors

Handling of errors

A member that makes a mistake in entering proposals into the ETFplus market may ask for the error handling procedure. Please note that:

1) the request has to be submitted to Markets Supervision of Borsa Italiana as promptly as possible by telephone, by sending a written request to the following e-mail address : ms@borsaitaliana.it;
2) the mistake has to be evident.

If there is no agreement between counterparties, Borsa Italiana may activate the “extraordinary procedure” when conditions 3 and 4 are also met:

3) the loss must exceed the amount of:
a) 12,500 € in case of mistakes resulting from the entry of a single order or quotation;
b) 25,000 € in case of mistakes, involving the same instrument, resulting from the entry of more than one order or quotation. The interval between the conclusion of the first and last trade to which the request refers must not be more than 60 seconds.

4) the price of the trade executed during the continuous period must be higher or lower than a fixed price obtained by adding or subtracting the maximum price variation limit of trades with respect to the dynamic price to the “theoretical reference price”. In case of trades executed during an auction phase, the maximum price variation limit with respect to the static price is considered.

 

In determining the “theoretical reference price” for the ETFplus market, Borsa Italiana refers to one of the following prices:

  • the arithmetic mean of the prices of a minimum of three and a maximum of ten consecutive trades on the same day, chosen among those preceding or following the error;
  • auction price;
  • the reference price;
  • the mean of the specialist’s bid-ask quotations entered on the same day, chosen among those prior or subsequent to the error if not affected by the error itself;
  • objective reference values available to the market.

The maximum price variation limit of trades with respect either to the dynamic or the static price is set, unless otherwise specified, according to the market segment where the instrument is traded (please refer to “Guide to the Parameters” for trading on the regulated markets organized and managed by Borsa Italiana):

The “extraordinary procedure” may result, among other, in one of the following action:

  • trades cancellation;
  • transactions re-pricing.


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